Corporation Tax Act 2009 section 548

Meaning of debtor repo

Section 548 defines what constitutes a "debtor repo" — a repurchase arrangement viewed from the perspective of the borrowing company that sells securities as collateral.

• A debtor repo arises when a company (the borrower) receives money or assets from a lender under an arrangement involving the sale and subsequent repurchase of securities
• The borrower's accounts must record a financial liability for the advance received, in line with generally accepted accounting practice
• The arrangement must include a right or obligation for the borrower to buy back the same or similar securities at a later date, and doing so must extinguish the recorded financial liability
• References to the borrower extend to any firm of which the borrower is a member, broadening the scope of the definition